China Molybdenum has inked a binding agreement with mining major Rio Tinto to acquire an 80% stake in the Northparkes copper-gold mine in Australia for $820m.
The Northparkes mine is situated near the remote town of Goonumbla, about 27km north-west of Parkes, a regional centre in central-west New South Wales.
In April, Rio Tinto hired Macquarie Group to handle the sale of its 80% stake in Northparkes.
The remaining 20% stake in the project is owned by units of Japan’s Sumitomo Group.
Rio Tinto chief financial officer Chris Lynch noted that Northparkes is a successful business but is not of sufficient size to be a good fit with the company’s strategy.
"Rio Tinto will continue to manage Northparkes to the highest safety and environmental standards during the transition to the new owner.
"The agreed sale of Northparkes follows our recently completed divestment of the Eagle nickel project in the United States, while the Palabora sale is now unconditional and expected to close on 31 July," Lynch added.
The sale of Northparkes stake adds to Rio’s list of assets being put up for sale, as it is looking to reach its target of slashing costs by over $5bn by the end of 2014 to focus on profitable assets such as the iron ore mines in Pilbara region of Australia, which contribute majority of its earnings.
Following the regulatory clearances and the approval of CMOC shareholders, the transaction is expected to close by the end of 2013.
Northparkes, acquired by Rio Tinto in 2000, produced 53,800t of copper and 78,994oz of gold in 2012, and exports the majority of the copper concentrate to Japan, China and India.
Image: Northparkes copper-gold mine is located near the remote Australian town of Goonumbla.